One of the most important element in the Global Business is Licensing. It is important to understand that a license agreement is needed in order for one company to produce a new line of products. You should acquire a license if you intend to develop a product based on an international brand. That means, if you are in the USA, you can have the right to manufacture and sell a product from Philippines or from any part of the world. A US company must pay a percentage to the company from overseas for the products rights. The licensing concept can also be applied the other way around. This time the US company will act as the licenser while the overseas company is the licensee.
The license agreement is not only limited to global networks. This is also applicable to domestic market. That means, within the US area or within the locailities.
The licensee should avoid some elements such as shipping costs, trade barriers and other circumstances when entering other market area. These areas will still receive a portion of revenue from overseas sales.